A Systematic Review of Financial Literacy among Malaysian B40 Households

Abstract

Despite the claim that fi nance management could be a potential risk factor to fi nancial behaviours, there is a growing need for an in-depth exploration of the characteristics of a household’s fi nance management in the context of fi nancial literacy. This paper aims to analyse the level of fi nancial literacy among low-income households (B40) in Malaysia based on a review of past literature. This study centres on how social and economic factors such as education level and fi nancial well-being infl uence the fi nancial literacy level of B40 households as well as on the interrelationship between fi nancial knowledge, fi nancial attitude, and fi nancial behaviour. Design/methodology/approach – Using the PRISMA statement, a systematic review was conducted across four databases namely, Scopus, PubMed, Web of Knowledge and PsycArticles where research articles with Malaysian household fi nancial literacy as the main feature are considered. Twelve articles were selected and two main trajectories were identifi ed: (1) Context at-risk: Financial Literacy of low income households (B40), (2) Target at-risk: Financial literacy and fi nancial wellbeing, socioeconomic and sociodemographic factors on low-income households (B40). Findings – This systematic review reveals that the fi nancial literacy level among B40 households remains low in most developing countries. Various socio-economic and demographic factors such as income, marital status and educational attainment infl uence the fi nancial literacy level of B40 households, potentially describing the existing relationship between fi nancial literacy, fi nancial well-being, and their contribution to the development of socioeconomic status (SES) of B40 households. In the Malaysian context, studies in this area remain underdeveloped and disorganized. Relevant studies are often concentrated on basic quantitative investigations. The National Financial Literacy Network emerged as the most widely investigated context with the highest risk infl uencing fi nancial literacy behaviours. Additionally, low-income households also emerged as a particularly vulnerable category. Originality/value – Financial literacy is signifi cant for low-income households (B40) to ensure their fi nancial well being. Research in this fi eld can be extended using Structural Equation Modelling (SEM) methods for a deeper understanding of the meanings of fi nancial literacy among low-income households (B40).